How Brutal Honesty Will Bring You Massive Profits, Happiness, and Success with Peter Kozodoy: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like Content is Profit. Today, we're pulling a timeless EO Fire episode from the archives, so the giveaway may not be active. And we'll be breaking down how brutal honesty will bring you massive profits, happiness, and success. To drop these value bombs, I brought Peter Cazadoi into EO Fire Studios. Peter is the author of Honest to Greatness, an Inc. 5000 serial entrepreneur, TEDx speaker, and business coach who works with organizations and leaders to help them overcome their self-limiting BS and use brutal honesty to achieve massive success.

0:43And he also lives in the lovely Caribbean island of Puerto Rico, enjoying life. And today, our foundation will talk about how lack of honesty in a variety of ways is a serious matter, why you have to stop lying to yourself about what you want and what it takes to get there, and that it just isn't going to pay to be anything but honest and transparent and so much more. And a big thank you for sponsoring today's episode goes to Peter and our sponsors. Business Made Simple, hosted by Donald Miller, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

1:16Business Made Simple takes the mystery out of growing your business with episodes like how to get out of your day-to-day operations without crashing your business. Listen to Business Made Simple wherever you get your podcasts. Peter, say what's up to Fire Nation and share something interesting about yourself that most people don't know. What's going on, JLD? What's going on, Fire Nation? It's awesome to be here. So let me share something that most people are shocked to learn, which is that I was a highly competitive figure skater. I was a figure skater for about 15 years, had Olympic dreams, broke all kinds of bones, the whole nine yards.

1:55You know, I'm actually not super shocked because we had a little video engagement right before we hit the record button here. And I actually dated a very high level figure skater who she was actually the little mermaid and Minnie Mouse on Walt Disney on ice for years. And so I got to hang out, kind of travel around with them. And you just frankly have that look and it's a good look, brother. I'm going to take that as a comment. That's actually how I met my wife too. So that's so cool. Very, very neat. Well, Fire Nation, we have a lot to talk about today. It's going to be a blast. We're talking about honest to greatness, how brutal honesty is going to bring you massive profits, happiness, and success.

2:35And Peter, your upcoming book, it's endorsed by Barbara Corcoran, which I'm very proud and have always been very excited to say was one of our power 20, the first 20 people I ever interviewed on the show. So she was very kind enough. I'll never forget to take my interview while she was getting her makeup done before an episode of Shark Tank. So it was pretty cool. And it had some background noise going on. But overall, it was a blast. And kudos to that. And it's about using brutal honesty to achieve massive success. So I just have to ask, like, why honesty? Why did that concept intrigue you so much as to write a book about it?

3:11It's a great question, because I actually never set out to write about speak about or frankly, even care about honesty. It's as surprising to me as it is to anyone that I've written a book about something we all learned in preschool. And yet, I think when we look around at the society we live in right now, it's pretty clear that we need a whole lot more honesty. You know, it's here in 2020. So, you know, to take you back and help everyone understand how I got here, let's go back to that figure skater, you know, 17-year-old Peter. And at that age, you know, I was the same size, 5 '7". I can't say I was smaller.

3:47I could say I was younger. the two things were true I knew two things to be absolutely true in my life the first was I was going to the going to the Olympics as a figure skater unequivocally that was what was going to occur and the second thing John is I was going to go to Harvard and I grew up on the south shore of Boston there was only one college for me it was in my backyard and that was Harvard well by 18 I had missed my shot at the Olympics it was clear that I just couldn't keep my nerves together to make it work. I applied to Harvard. Harvard sent me a letter back saying, thank you, but no, thank you.

4:21Don't call us. We'll call you. And from that point on, I won't lie. I mean, I was devastated. I was devastated. And I ended up going to another college. And when I came out, I started a company. Well, it's a long story, but the short story is we started a video production company, my business partner and I, having no idea what we can do. I've always been the type to think I can do it better. And so the great thing about that is when you think you do it better, you can go start a business. The bad thing about that is when you think you can do it better, you actually have to go out and do it better.

4:57So we spent a lot of years having no idea what we were doing. John, we were shooting$800 television commercials for local car dealers, which is exactly as glamorous as it sounds. And I remember thinking like, wow, if we could only shoot more$800 television commercials, we would be rich, right? We'd be rich. That's the path to millions. Well, apparently I had not studied hard in my math classes at college because if I had, I would have realized that that was the stupidest thing I could have thought. It was just unfeasible for a whole lot of reasons. And again, this is sort of young 20s entrepreneur, more gumption than brains.

5:32So eventually we pivoted into being a full service marketing agency. And the reason we made that pivot is because we were getting hired by other agencies. And we realized that they kind of sucked. They didn't take care of their clients. They overcharged. They missed deadlines. Their strategies weren't that good. We were like, we can do this better again, right? We can do it better. So what do we do? We slapped a new label on our agency. And now, boom, we're a full service marketing agency. And so quick story, the way we got our first client was that we were doing videos for a local college and shooting their students and listening to their stories.

6:11And one day the VP of marketing called and said, hey, we have a pitch open. We're going to hire a full service agency. It's about a million dollar account. Do you want to come pitch? Do you have the resources to do this? And so we put the phone on on mute. And we were like, OK, well, you know, we need like graphic design to do. We need an account manager. We're going to probably need some web developers. Do we have the resources for that? No, no, definitely not. So, you know, we picked the phone back up and we said, yeah, absolutely. We want to come and pitch. We'll be there at whatever time you need.

6:40We're ready to go. So, you know, we're in the pitch. And at the towards the end, we show this video we had been recording of their students and the students are talking. And then we reveal our tagline, which is the foundation of the entire campaign. And the room goes quiet. And the president looks down at what we've done, pauses. And then she looks up and says, where did you get this? I've been looking for this for years. And I was tempted to say, well, because we're the biggest bunch of geniuses ever, of course. That's why. But I didn't, because that wouldn't have been honest. Instead, I said, your own students gave us this.

7:19This is how they really think and feel. And these, by the way, are the only people who matter, the ones who pay you money for your product and service. And so throughout building my company, I got very interested in how honesty plays into the organization and into the executives. Because it's not just being honest about your customers, what they think, but I was always fascinated by how some of our clients took our growth strategies and just like crushed it, got like a 500, 600 % ROI, loved us, stayed with us for years. And others, John, we would work with, we'd give the same love, attention, strategies, and they would just blow up on the launch pad.

7:58I mean, they could not get out of their own way. They descended into infighting and politics and bullshit, quite frankly. And I always chalked it up to stupidity. I was like, these people are a bunch of morons. But of course, they weren't. That was me being a moron. It takes a tremendous amount of acumen and intelligence to become an executive in any role. What I actually found over the years was it was something much more serious, which was a lack of honesty in a variety of ways. Honest about what was going on in the world and how consumer trends were changing, honest about what was going on with their fellow executives or their customers, or dishonest with themselves and with their own biases and self-limiting beliefs as a leader.

8:42And I saw many. And it wasn't until I had my own crisis of honesty, that the whole thing solidified for me that I made sense of this both, both in the organizational sense, and in the personal sense. And something terrible happened to me, John, which it took me years to get over. I don't know if this has happened to you, but I turned 30. Oh, my God, I don't know how people survive that. It was just devastating. I was like, this is all. I mean, I actually, so I turned 30. I'm like, okay, this isn't so bad. And then as I like looked around, I just sort of descended into darkness. I just started beating myself up over what happened because I realized that those two massive failures I had at 17 had been sticking with me, had given me these big weights on my shoulders that said, Peter, you can strive for greatness, but it's never going to be the best life because you already failed at that.

9:41You're already done. You're already a failure. And it turned out I was carrying that around. So by 30, I looked around, listen, I had built a million dollar company. I had just married my wife. We were flipping a new house. I mean, for all intents and purposes, I should have just shut the hell up and been happy, but life doesn't work that way. And I realized that there was so much more that I still had in to do. And that's when I realized I had been dishonest with myself. You know, here I was preaching organizational honesty, and I had failed to get out of my own way and realize my own self-limiting beliefs.

10:14And in the year after I turned 30, John, I achieved more than I had in the 10 years prior, one of these things being the book that is now going to come out this year. Fire Nation, I hope you can just hear and understand and absorb through what Peter's sharing right now how critical being honest is. I mean, when you were talking, Peter, the quote from Warren Buffett that I love so much, it takes 20 years to build a reputation, but literally five minutes to destroy it. And let me tell you, there's nothing that's going to destroy your reputation quicker than when somebody finds that you've been being dishonest to them.

10:46Because as human beings, we just hate when people are dishonest to our face. It's sometimes irreparable. Like it truly is. And like, I go back to my early days back in 2011, 2012, when I didn't think you could be honest and genuine and be a good person and launch a successful online business. Because, you know, I spent eight years in the army and I was like, you have to be like, you know, just dutiful and disciplined and you have to, you know, always be honest with your soldiers and your commanding officers. And it seemed to me like the online world didn't hold that. But fortunately, I was able to find some mentors who were very successful in the online world while being honest and good people and genuine and transparent.

11:26And that's why now for eight years, we've been publishing income reports because I want people to be like, here's the honesty of entrepreneurs on fire. Like here's all the money they make, but here's the money they actually keep like because of all of the expenses. Like anybody can have Fire Nation, a six-figure launch when you spend seven figures in marketing. Like, and that's, unfortunately, they leave out that last part. I just had a six-figure launch, but where's the honesty? Like, where's the transparency? It's missing in this world, Fire Nation. And it's so critical. So can you do this for us, Peter?

12:00Can you define that word? Define honesty after everything that you've been through writing this book? Let's first talk about what it isn't. So in my book, I interview CEOs from the Ritz-Carlton and Domino's Pizza to Ray Dalio at Bridgewater Associates, the largest hedge fund in the world. There are so many amazing CEOs in this book. And one of them made the point that if you're flying in an airplane and the pilots come over the intercom and they say, well, folks, we've never seen storm clouds like that before. So please put your seatbelts on. We have no idea if we're going to get through this.

12:35Oh, no. So is that honest? Yes, of course. Is it helpful? No, not really. So any parent will tell you, you know, just blurting out the truth about everything all the time. Probably not a good idea. Instead, I stratify honesty into three important layers, which makes up the top half of what I call the hourglass of honesty, which is the central framework of the book. Organizations and leaders who end up making ridiculous amounts of money and dominating their industries. And by the way, John, this is not an ethics book. This isn't about like, oh, let's be touchy feely honesty. No, no, this is a make tons of money book.

13:10Honesty is just the way to do it. the first level is getting honest with your community, with what's going on in the world. I mean, look at where we are here in 2020. We're in the middle of a zombie apocalypse pandemic. We have incredible amounts of horrendous racial discrimination, gender bias. I mean, we're living in a world with these huge megatrends going on, and we can't afford to put our heads in the sand about these things. And we have to be honest about what's happening, about how society's changing, about how gender norms are evolving, all these things, they're not going to go away. We need to be honest about them and operate in this environment without clinging to the status quo of how the world was 20 years ago.

13:52Too bad. It's moved on. The second level is being honest with and about the others around us. And this is an important distinction because sometimes we do need to be honest with the people around us, whether those are our fellow executives or our customers or our family and friends and spouses, right? But other times we need to be honest about them, about what their thought processes are and how different those thought processes might be from our own, about their own experiences that we can't understand. You know, this is where empathy comes into play. And so seldom do I see executives who have mastered this idea of be honest about where people are coming from.

14:33They're usually too busy asserting their own quote-unquote successful ego and whims on those around them. Now, mind you, the greatest leaders of our time that I profile do exactly the opposite. They shut up. They listen. They ask open-ended questions. They remain open-minded at all times. And the last piece is getting honest with and about yourself, with your own biases and self-limiting beliefs as a leader and continually probing at ever deeper levels to ask, is that true? That thought I just had that idea I just came up with? And how do I know? And what I found, John, is that leaders and organizations that get honest on all three levels end up fundamentally different.

15:16I mean, if you think about it, honest John is different than dishonest John. You know, if you're really willing to be honest about who you really are and what you really want, you are a fundamentally different person with fundamentally different wants, fears, beliefs, desires, and so on. What I find is leaders and organizations who get there, they end up as such a different kind of person or entity, they end up changing the others around them, their inner circle. And once they do that, and they change their customers, they move from these customers to those ones, they change their frontline employees, they swap out their fellow executives, what happens is they end up moving rapidly forward and bending the community towards them and creating just industry-dominating results.

15:59Let me give you a quick example. Domino's Pizza, back in 2008-9, realized they had a problem. They were doing some surveys and focus groups with their customers, and they realized that their customers didn't like their pizza very much. It just wasn't very good. Their flagship product for which they were named, right? Not only that, but when they put their own pizza in competitors' boxes, the customer said, oh, actually, this tastes better. So they didn't just have a pizza problem, they had a brand problem, right? Bad news. So listen, they could have just updated the pizza, thrown on some better tomatoes, ran an ad about it, and that would have been that.

16:33But they didn't. Instead, in 2010, J. Patrick Doyle, the brand new CEO, took a sledgehammer to his own brand. He went on national television. He said, I'm sorry, it turns out our pizza is terrible. And you should deserve better than this. And we're going to make this right. And they proceeded to expose all of the videos they had taken of customer focus groups and reactions and made updates about what they were doing. They brought cameras into the kitchen. Here's how we're updating the ingredients and everything. And if you had noticed that, John, around that time frame, you said, damn, this company's honest about where it's at and what needs to change, and they are doing it.

17:12And you had bought Domino's Pizza stock, you would have had an over 3 ,000 % return over the next 10 years. Think about it. Our product is terrible. That was the main strategy there. Not only was he not fired, he made people just amazing amounts of money and they're still thriving today. Why? Because they got out of their own way, out of their own assumptions, and they brought the public in, just like you were saying about your expense reports. When there's nothing to hide, then it's awfully easy to trust. There's so much I love about this. I mean, one thing I kind of want to double back on, Fire Nation, is point number two, being honest with or about the people around us.

17:48I mean, take stock of these words, Fire Nation, like, are you doing this in your world? And I love, Peter, how you put that comment in there. Great leaders, they actually listen and they ask open-ended questions. And I mean, Fire Nation, we all have those friends where we go over to their house for dinner and they just talk nonstop. And then you kind of take stock after the night. You're like, that person didn't really ask me a single question. And it's just like, do they even care? Like, do they even care? They're just looking at me like, you know, some kind of sounding board. And that doesn't make for a great leader.

18:20And that's why great leaders, they listen and they ask those open-ended questions. And I just love that example about Domino's. I mean, I can remember that so clearly when that happened, because I have never liked pizza. Like I don't hate pizza. I just don't like it. Like, it's just like, eh, it's okay. And that commercial made me want to try the Domino's pizza. And like, so imagine what that did for people that actually did eat pizza. I mean, it's such a no, I'm like, these guys are actually going to do it. And I mean, I think it's a car company, Avis, Peter, where their whole tagline's like, we're number two, therefore we try harder.

18:52So like here they are not pretending they're number one. They're being honest. They're like, you know what? Hertz is number one. Although now Hertz is bankrupt. They're like, they're like, Hertz is number one. We're number two. But guess what? Since we're number two, you know, we're the underdog. So we try harder. And you know what? Like I believe them. I'm like, man, like they're being honest about being number two. They're probably being honest about trying harder too. Like, why would I not go to somebody who's trying harder? So I just love all of this stuff. Like so many great takeaways here.

19:18And you're a guy, I don't know if this came after, or you've always been this way, um, after this book and you realize being honest is awesome. You know, you make pretty bold statements. And one of those bold statements that you've made is that most people are inherently dishonest. What do you mean by that? I told you exactly what happened to me, right? I had to get, confront my own self-limiting BS. Yes. And I want everyone to understand, like, I was the one voted most likely to continue being an asshole in high school, like for me to be talking about honesty and vulnerability. And like, this should be shocking to people.

19:52I had to learn this the hard way. Because I didn't get it because I thought I had all the answers. I'm sure, you know, we were talking entrepreneurs right now, you all think the same way. And sometimes we do need to just roll forward, you know, with our big, bold ideas. But what I found is that we miss so many things when, when we do that. so I now I work with a ton of other entrepreneurs and I run a group for them we meet once a month by video by zoom and it's completely confidential 100 confidential and 100 vulnerable and the whole idea is for entrepreneurs to be able to come and share what's really really going on in their businesses in their personal lives in their family lives the things that sometimes they don't even feel comfortable sharing with their spouse or parents or kids or whomever.

20:40Because what I find, John, is that 99 % of business problems are personal problems in disguise. Somewhere along the line, we're lying to ourselves about where the issue is and what we really need to do. Give you an example. I was working with an entrepreneur a couple of years ago. He had created this device that bolts on to water supplies at a water treatment company and instantly saves them money. It's sort of a gauge for measuring different things. And he was like, yeah, I've installed it in a couple of places and they've instantly saved thousands of dollars. And of course, that's good for taxpayers, good for everyone.

21:16I said, that's fantastic. Why haven't you gone and called on all these companies to go and sell it? He said, oh, well, I can't do that. I can't. I said, why? I'm not very good at it. What do you mean you're not very good at it? Well, I mean, I don't feel comfortable with it. And I said, OK, well, let's unpack that. Describe uncomfortable. What does that mean to you? So he said, listen, I hate cold callers. I hate to be cold called. I'm not calling anyone out of the blue because they're just going to shut me down. They're going to think I'm a bad person. I said, that's interesting. Well, let's talk through that.

21:45So what you're saying is that only the organizations who are, who find you are the ones who are going to get this product. And he's like, that's right. Yeah. I mean, if they find me, they get to refer, they find my website. Fine. I said, okay. so the companies that find you and do business with you, they're going to save a lot of money. He said, yes, exactly. And I said, okay, good. So what you're saying is that the companies who are lucky enough to happen to find you are the only ones who deserve to save money. And the other companies who you are not confident enough to reach out to, they do not deserve to save money at all.

22:19Is that what you're saying? Well, no, no. I mean, when you put it that way, you know it's always getting to this nugget in the middle it's it's not that i don't you know i can't sell it's that i have this self-limiting belief about what a salesperson even is and when you unpack that for people i find that they can have dramatically uh earth-shattering kind of moments i love helping entrepreneurs have those moments because entrepreneurs uniquely can make drastic changes in their life and business immediately i can't tell you john how many times an entrepreneur has come to me and had this belief about what a successful business is.

22:58And when I've tapped into that, I've been like, well, why don't you want to build this business in Mexico working two hours a day? And they'll be like, well, I'd love that, but that's not possible. Well, really, let's talk about what's possible and what's not possible. Because as soon as you say it's not, then you're right. And you're a perfect example of someone who said, forget this, I'm moving to Puerto Rico, hanging out with palm trees, I'm going to build a lifestyle business. Of course it's possible. But you have to ask the right questions and you have to stop lying to yourself about what you really want and what it takes to get there.

23:26It is so crazy, like the stories we tell ourselves, because I can remember so clearly, you know, I was living in San Diego, the quote unquote epicenter of the location independent and financially free entrepreneur. Yet they were all telling me I couldn't leave San Diego. And I'm like, but wait a second, like, this is where people come because they can come to San Diego. It's a beautiful, amazing place to live. But I obviously have an amazing need and reason to leave and go to a place like Puerto Rico, which is a tax haven. And you're telling me I can't, I couldn't like continue my business there.

23:54Like that's kind of like exactly the opposite. So like how are people being dishonest to themselves about, you know, what to me was such a clear opportunity to go forward and do exactly what I wanted to do with this business. And for me, it's just so obvious, Peter, that there's so many people that have these self-limiting beliefs that they're there because they just haven't thought through them. And so I ask you, Fire Nation, what do you have for self-limiting beliefs that you haven't thought through that honestly are just kind of like all flimsy and it's a house of cards? How are you being dishonest with yourself, Fire Nation?